During the housing boom, Florida homebuilder Technical Olympic USA (toa) hasn’t been shy about setting up off-balance sheet joint ventures to acquire land and other housing assets. According to the company’s 10-K, these joint ventures ”reduce and share our risk associated with land ownership and development and extend our capital resources.”At least that’s the way it was supposed to work.

In an SEC filing Monday, Technical Olympic said it has been advised by one of its lenders, Deutsche Bank Trust, that it’s in “multiple potential defaults” on $675 million in debt associated with an unconsolidated joint-venture created a year ago August through the purchase of Transeastern Properties. According to the filing, the bank wants Technical Olympic to pay “all” of the joint- venture’s outstanding obligations.

Technical Olympic says it doesn’t believe it has triggered any covenants and has “formally disputed the allegations…” It further says the debt was non-recourse.

Regardless of whether it was or wasn’t -- and no matter what happens with this situation -- some observers believe even the claim of default could represent the first attempt by a bank to push debt associated with land banks back to the company that created the supposedly low-risk joint venture.

That’s a far cry from what was expected when the JV was created.

In a press release announcing the deal, touted as the “largest private homebuilder acquisition in the industry’s history,” Technical Olympic’s CEO Tony Mon said, “We believe Florida’s rapidly increasing population, positive demographic trends and employment growth, combined with the limited supply of land and permits, will continue to make it one of the strongest markets in the US for the next several years.”(looks like a buy call on the basdag at 5000/sieht aus wie ein kauf des nasdag bei 5000 punkten...)

With the benefit of hindsight, he said at a Deutsche Bank high-yield conference last month that Transeastern was acquired at “the top of the market. We never thought it was going to be the top of the market, but it frankly turned out that way.”